Greek talks collapsed amid anger, insults, “unreality”

posted at 9:21 am on May 21, 2012 by Ed Morrissey

This may end up being the political quote of the year, uttered by the president of Greece after talks aimed at forming an emergency government collapsed last week:

“Gentlemen, we are finished,” said the patrician President, calling an abrupt halt to two hours of baiting and cat-calling between furious Greek politicians. “I’m starting to get upset myself now. We are finished.”

The final collapse of talks to forge a new Greek government triggered repeat elections and fears of a chaotic exit from the euro zone. But it is the manner of that collapse, the acrimony and rancor cited by Karolos Papoulias, that bodes ill for efforts after June polls to pull Greece back from the brink.

“It was a complete madhouse,” a source at the socialist PASOK party told Reuters after their leader,Evangelos Venizelos, returned from the May 17 showdown. “The discussion was unbelievable.”

The only people who don’t seem to realize the depth of the truth in that quote are the Greeks themselves:

Voters infuriated by grinding poverty, spending cuts and corruption, punished Samaras and fellow mainstream party leader Evangelos Venizelos. Leftist Alexis Tsipras, 37, emerged with the power to block them. Greece, he said, could ditch its spending cuts and renounce its debts to EU partners, yet enlist their help in keeping the euro currency some 80 percent of Greeks cherish.

“Pythagoras didn’t manage to square the circle and god knows these guys don’t know how to either,” said one EU diplomat in Brussels, echoing widespread sentiment in European capitals.

“The Greeks seem to have no understanding of the seriousness of their predicament and that is a great source of frustration. There’s a breaking point and I think we’re getting close to it.”

Just how unreal is Tsipiras? Today he’s assuring Europe that he wants to stay in the Euro, but without the austerity conditions on Europe’s rescue of Greek insolvency:

The charismatic Greek leftist who could determine the fate of the euro begins a tour of European capitals on Monday carrying a single message: it’s time to talk.

In an interview on the eve of his first visit abroad since his surprise rise in a May 6 election, Alexis Tsipras veered occasionally into the combative rhetoric that has seduced disaffected Greek youthand alarmed Brussels and Berlin.

Tsipiras is touring Europe, but he’s not meeting with government officials. Instead, he will meet with leftist organizers in France and Germany, apparently to build political pressure on both governments to end the austerity conditions and convince them to hand Greece billions of Euros for more “stimulus.” France just elected Hollande, so they might be sympathetic, but Germans have supplied the main part of the money for Greece’s bailouts, and they’re tired of being the EU’s ATM.

The leaders with whom Tsipiras is not meeting offered this warning — if Greece doesn’t accept the austerity conditions, they are finished:

European leaderssay that if the next Greek government spurns the bailout, they will have no choice but to cut off funding, which would effectively bankrupt Greece and force it out of the euro. The prospect sent the single currency tumbling last week and hurt the bonds of Spain and Italy, countries that could be next in the firing line if Greece collapses.

One way or another, the bill is coming due. The “disaffected youth” of Greece are about to learn that their profligacy isn’t going to be subsidized forever, and it might get very, very ugly in the birthplace of democracy. Given the propensity of their military over the last several decades to seize the reins of power, these politicians might truly be finished if they don’t get serious quickly.

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The “disaffected youth” of Greece are about to learn that their profligacy isn’t going to be subsidized forever, and it might get very, very ugly in the birthplace of democracy.

Since all rights flow from the government the only obvious solution left is to confiscate all wealth and foment rev(the letter 0)lution in those European nations refusing to grant “rights” to the needy Greeks.

Do not underestimate the inherent stupidity of entitlement minded youth Ed. They will burn the whole damn system down and destroy their own futures and their children’s futures before they get a clue.

Tsipiras is touring Europe, but he’s not meeting with government officials. Instead, he will meet with leftist organizers in France and Germany, apparently to build political pressure on both governments to end the austerity conditions and convince them to hand Greece billions of Euros for more “stimulus.”

You cannot be serious. Germany is letting this clown come in and foment mayhem in their country? Europe is over – sooner rather than later.

Today he’s assuring Europe that he wants to stay in the Euro, but without the austerity conditions on Europe’s rescue of Greek insolvency:

I’ll give Tsipras this, he’s got nerve. Thinking he and Greece are in a position to dictate the terms of their bailout. In the end, it may be successful because the Eurozone doesn’t want to see their house of cards fall and make no mistake that the Euro is largely built on bogus numbers.

The Greek government ought to invest all of the money Germany gives them in Facebook. They’ll still be back to the drachma at the end of the day but they’ll remain well connected to the rest of the world.

Tsipiras is touring Europe, but he’s not meeting with government officials. Instead, he will meet with leftist organizers in France and Germany, apparently to build political pressure on both governments to end the austerity conditions and convince them to hand Greece billions of Euros for more “stimulus.”

I am encouraging the voters in CA to approve the tax hikes. If they haven’t learned their lesson by now, let ‘em keep digging. Maybe some of the other states will take notice and wise up.

mankai on May 21, 2012 at 9:45 AM

California, like the US doesn’t have a taxing problem, they have a spending problem. You don’t cure an addict by figuring out how to better get them their fix. What California needs is an austerity plan instead of finding new ways to redistribute wealth.

What is even more tragic than what’s occurred in Greece is that Socialists/Marxists in the U.S. and elsewhere don’t *get it* that as Greece has gone, so they will go if left uninterrupted in their irresponsible ways.

Europe has lost every cent they poured into Greece and that was a foregone conclusion. A waste of money on a gigantic scale, and yet the Greeks boldly demand more, without getting their house in order.

FTA:” What is it? It is a picture taken at the Athens ministry of finance.

It is part of a full documentary (go to 24 minutes in for the lack of money shot) released a few days ago by German TV station ZDF called The Greek Lie. It is self-explanatory, and shows where 2 years of bailout funds went, or rather didn’t, and why 2 years to the day after the first bailout, not only is Greece not fixed, but is days away from leaving the Eurozone, but at a cost to taxpayers of nearly half a trillion.

We urge anyone, even non-German speakers, to set aside 45 minutes and view the clip below. It is unsettling at best.
”

One problem is that they see austerity as a measure against growth, which tells me they are relying on government spending to increase growth. What they are doing is chasing away the people that cause private economic growth, even tourists.

They are chasing away the people who create an economy. Who wants to visit Greece when the unruly mob is on the loose? Who wants to live there and try to create a business when the unruly mob wants to tax you at 99.5%? Greece has even more problems than most places because it lacks certain resources that have to be brought in by import.

I am wondering if the Greeks get their info on the internet, the tv media, or from newspapers, and how skewed left the media is, and if it is shaping opinion. Do they actually get an example in the media, like from a Fox News, telling them how to make austerity work, and shorten the pain? They really need to listen to a corollary of opposing view points.

I am encouraging the voters in CA to approve the tax hikes. If they haven’t learned their lesson by now, let ‘em keep digging. Maybe some of the other states will take notice and wise up.

mankai on May 21, 2012 at 9:45 AM

No, no, no. California’s problem is it’s Leftwing legislature and Leftwing spenders. They will tax everything until they arrive at where California is today…which is deeply in debt and nearly out of tax-payers.

Most of the earners and tax-payers have left the state, and what is left in California is a giant population of dependents on other people’s money, except those other people have mostly all left or are planning on doing so.

So the dependents — represented by the Leftwing legislature in CA — are frantically trying to figure out where to get more money from other people because the state’s population is by majority now not paying taxes of any significance and is taking far more than they’ve ever paid.

California has the highest percentage of welfare dependents in the nation. They also have some of the largest “sanctuary cities” in the nation with the highest population of illegal aliens…who are included in those “welfare dependents” in the state.

It does not take too much intelligence to understand what California’s problem is. They’ve rewarded takers and punished makers and the makers have largely now left the state because of that.

I would never encourage anyone to vote to raise more taxes in California. To do so, to vote for more taxation in that state would be like hiring a h.e.roin junkie as a pharmacist.

Europe has lost every cent they poured into Greece and that was a foregone conclusion. A waste of money on a gigantic scale, and yet the Greeks boldly demand more, without getting their house in order.

Four more years of Obama, and we’ll have the same bill coming due. Only it will be trillions, not billions.

Rovin on May 21, 2012 at 9:35 AM

If we paid off our debt at a rate of $100B per year, without another dime of debt being added, it would take 160 years to pay it off. This does not include the unfunded liabilities of ~$130 trillion over the next 75 years. In other words, if George Washington had the debt we have now, and the Congress had been paying it off at $100B per year with no new debt, we would still have 100 years to go before it was gone.

He said he was looking to forge ties with like minded European figures, including new French President Francois Hollande, who want to soften austerity policies by finding new ways to encourage growth.

If those two want to find ways to encourage growth, they only need to look at what the financial minister of Sweden has done.

When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut. To critics, this was fiscal lunacy — the so-called ‘punk tax cutting’ agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.
Three years on, it’s pretty clear who was right. ‘Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,’ he says. ‘Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.’ Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history.

Ed, it’s the people who have to change. The politicians generally conform to whatever the people want, so they will get re-elected. Waiting for a “better” politician is a fools game. That’s the core failure of socialism: they believe in the perfectibility of man. The Europeans have some really tough times ahead of them. Let’s hope that their pain, along with Obama’s continued failures, will shock the US citizens sufficiently to help us truly change course before it is too late. Only then will our politicians be forced to make better choices.

The Germans won’t take this much longer. They weren’t even given a referendum to enter the EU or the Eurozone, the government did not ask the German people, the political class made the decision for them.
There is no “conservative” or “right” in an American sense there. The closest they come is what we’d now call “compassionate conservatism”, and they’re about to learn what big government reaps. Hopefully they will ultimately learn that “austerity” with self-reliance, individualism and freedom is all that will work for human advancement.
Meanwhile, back at Rancho America, our Clown Prince thinks he can pursue European goals without getting European results (Paul Ryan’s words).

Just how unreal is Tsipiras? Today he’s assuring Europe that he wants to stay in the Euro, but without the austerity conditions on Europe’s rescue of Greek insolvency:

Well, about as unreal as Obama:

Leaders of the world’s wealthiest nations opened the door Saturday to more government spending in Europe as way to revive the continent’s struggling economy, shifting away from the idea that the only way to recovery was through strict fiscal austerity.

The Greeks, presented with a unified response from both Europe and United States might have knuckled down to do what they needed to do. But with the United States (and probably France too) sticking shivs into any austerity plan, it’s dead.

I guess everyone has to learn what we learned as a result of the Stimulus — the effects vanish the moment the money goes away, and causes a huge hangover effect which actually makes the economy worse.

Too bad. I’m sure the Greeks, when not overcome with credit card madness, are nice people.

One way or another, the bill is coming due. The “disaffected youth” of Greece the United States are about to learn that their profligacy isn’t going to be subsidized forever, and it might get very, very ugly in the birthplace of democracy Ronald Reagan and Abraham Lincoln.

Just fixing this so it can be used in a few years if, G-d forbid, 0bama is re-elected.

It is sad that in the birthplace of democracy that the military has been the better option for running the government. I hope the military takes power in Greece, and rule in the same excellent way that Pinochet did in Chile.

It is important to remember that the Athenian Empire, especially in the absence of strong leadership, practiced a form of democracy which was barely distinguishable from mob rule, a mob easily swayed by the various demagogs.

In that sense, the modern Hellenes are proudly carrying on some of the worst traits of their ancestors.

The Greek government needs to bring back the drachma, its pre-Euro currency. Start paying everybody in drachmas, assuming (for example) 1 Euro = 100 drachmas, then if things go south, print up enough drachmas that the drachma devalues against the Euro, and Greek exports and tourism seem cheap to the rest of Europe.

The more fiscally responsible countries of Europe don’t have the money to bail Greece out anymore–let the Greeks have their own money, and let the market bail them out, and a fair market price.

Forget all this economics stuff. How does Greece feel about same-sex marriage?

The Rogue Tomato on May 21, 2012 at 10:18 AM

LOL. Yes, the war on women there is also affecting negotiations between Greece and Merkel’s Germany. Talks broke down when they couldn’t agree on whether or not Germans should fund the Greeks’ inalienable right to free contraception.

The Greek government needs to bring back the drachma, its pre-Euro currency. Start paying everybody in drachmas, assuming (for example) 1 Euro = 100 drachmas, then if things go south, print up enough drachmas that the drachma devalues against the Euro, and Greek exports and tourism seem cheap to the rest of Europe.

The more fiscally responsible countries of Europe don’t have the money to bail Greece out anymore–let the Greeks have their own money, and let the market bail them out, and a fair market price.

Steve Z on May 21, 2012 at 10:31 AM

The interesting part will come when they start having export restrictions on Euro and have “mandatory” switches of Euros for drachmas at an artificial rate.

We need two things to make the debt irrelevant in the next 30 years, one of them is not trying to pay it off. Instead concentrate on balanced budgets and economic growth. The only way to kill the debt is to shrink it relative to GDP. Double GDP and the debt becomes 50% of GDP instead of 100%.

Good grief, Ed, this is a sloppy post. Here’s why: You’ve got garbage characters in the second quote box, you’re misspelling Tsipras name, and the Greeks aren’t getting “stimulas” money, the European Central Bank (and the IMF) are rolling money into Athens to pay off bond maturities. That money then rolls right back out the door into the hands of creditors throughout Europe (and the world). Not that much of it sticks around to do anything in Greece. The treaty between Greece and the ECB/IMF is that in exchange for the cash the Greeks have to follow the austerity program which requires selling off state assets like train lines and so forth, trimming the public payroll, and a lot of other things forcing Greece to get competitive within their heavily-socialized economy.

Ed, you said: “The “disaffected youth” of Greece are about to learn that their profligacy isn’t going to be subsidized forever, and it might get very, very ugly in the birthplace of democracy. Given the propensity of their military over the last several decades to seize the reins of power…”

The Greek military has been truncated since the fall of the Junta in 1974, and the recent Greek military leadership was shuffled last year precisely to prevent any chance of such action. You have to go back to 1967, not “last several decades’ to find a military coup, Ed!

Tsipras is promising Greece they will get to stay on the euro and will be able to back-out of their treaty obligations (and the severe economic contractions that have accompanied it). Tsipras might be right, because the EU leadership is afraid of what happens NEXT in Spain (and possibly Italy) if they let Greece commit hari-kari, which is what putting Tsipras in charge would accomplish.

The only way, as I see it, once the economic collapse hits here and doubles unemployment, is for us to reclaim jobs from Mexico and China.

We have to build things again. We need factories where unskilled Americans can work to put “food on the family” ;-)

If you look at where everything is made, each of those goods represents exported jobs. If you realize how the vast majority of everything used in America is now made abroad, you can see that there are jobs to be retrieved, when it really hits the fan.

Now… the workers aren’t going to like the wages, at all!

But, barring just cutting all the unemployed a funny-money check for not working, we have to put people back to work – even at subsistence wages. Once more Americans are working again, there is room for improvement.

Of course the debt has to be serviced, but the interest payments become less meaningful as GDP grows and the debt remains static. Assuming that government revenues remain at 18% of GDP (the historical average) the debt service payments will shrink as a parecentage of federal budgets as GDP grows. There is no reasonable way to simply pay down the debt. Not without confiscating 1/3 to 1/2 of all private citizens entire net worth. We need a BBA (Balanced Budget Amendment) and strong economic growth. That is the only way to beat this monster in 25 to 30 years.

What I do not understand is that short of discovering a large deposit of refined unobutainium the Greeks will never never every pay off their debt. It is physically impossible. This is clear to the most humble of peasants.

Yet governments of the world and large banks keep giving the Greeks bailouts.

Don’t be so dramatic. You know as well as I do that this debt won’t be paid. The current generation being born won’t even have to bear this it. They may not have a country but they won’t have debt either.

It is important to remember that the Athenian Empire, especially in the absence of strong leadership, practiced a form of democracy which was barely distinguishable from mob rule, a mob easily swayed by the various demagogs.

In that sense, the modern Hellenes are proudly carrying on some of the worst traits of their ancestors.

Laurence on May 21, 2012 at 10:19 AM

You can’t expect humanity to get democracy right on the first try. Sadly, we seem to continue getting it wrong. Occupy Wall Street was an attempt to resurrect Athenian mob rule. They were right when they chanted “This is what democracy looks like.” Of course, historically it has been the enemies of democracy that thought mob rule is what democracy looks like.

To a large extent Greek democracy was a happy accident of the phalanx. As a military tactic, the phalanx made everyone on the team as important as everyone else. Given such an origin, Greek democracy was doomed to have issues in the early stages. It never really got past the early stages.

We need two things to make the debt irrelevant in the next 30 years, one of them is not trying to pay it off. Instead concentrate on balanced budgets and economic growth. The only way to kill the debt is to shrink it relative to GDP. Double GDP and the debt becomes 50% of GDP instead of 100%.

NotCoach on May 21, 2012 at 10:36 AM

I’ll grant you that doubling GDP in 30 years isn’t nearly as difficult as it appears to be. That’s a little over 2% a year, but the truth is we don’t have 30 years so growing out of this isn’t an option.